US Election SJN [Read-Only] · US election investment conclusions US Dollar will be cyclical...

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US Election 2012

October 2012

US Election and Markets 2012/13

Chief Economist Steen Jakobsen

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Economics one-on-one

Macro

Micro

Joseph Schumpeter John Maynard Keynes

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The US business cycle could not care less…..

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President Obama did keep one promise...

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Obama’ inherited this in 2008…..

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Obama’s presidency in raw numbers

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Everybody’s hero: Prez Reagan started the excess….Obama perfected it…

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Obama & Bernanke went all in ……

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Election cycles & other mumbo jumbo statistics..Theory #1

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Election cycles & other mumbo jumbo statistics..Theory #1

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Election cycle & other mumbo jumbo statistics..Theory #2

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Election cycle & other mumbo jumbo statistics..Theory #2

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US economy is close to the inflection point

• Fiscal cliff is serious for US and global economy

• Private sector is printing jobs on par with 05’

• Housing has stabilised, net positive in 2013

• US shale gas – a major game changer

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Why does fiscal cliff matter to investor…the math:

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The wonders of micro economy and markets

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Game changer: US shale gas

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Demographics are not a drag compared to peers

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“Reality divergence” largest since Dot-com bubble

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The law of mean reversion

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US election investment conclusions

US Dollar will be cyclical stronger over next period (long USD)

Long yield at historic lows (short fixed income vs. Stocks)

Unit Labor cost importance will fall – Reshoring (Buy US vs Asia)

Both absolute- and relative valuation stretched – correction before decade long outperformance (2013 = transition)

Short Crude/Coal vs. Natural Gas

Micro-economy best ever – buy Small Cap stocks vs. Big Cap

Phase out long Gold and ”being scared” trades….